Breaking Records: Gold Shines Brighter Than Ever Before
- Max Fountain
- Sep 30
- 2 min read
From ancient empires to modern investors, gold has always been a symbol of status, wealth, and security. Today, gold is breaking records and climbing to all-time high prices that have the markets buzzing and investors leaning in. Gold is used by investors as a haven, guarding against inflation and uncertain geopolitical events, offering stability when other markets feel volatile. Gold serves as a non-correlated asset, meaning it does not move with the same intensity as the broader stock market. This implies that gold hedges against currency debasement, protecting investors if the US Dollar loses purchasing power or inflation spikes.
The main question is: Why has gold spiked so high so quickly? Gold has risen so quickly because of a convergence of measurable factors. One of the key player is the central bank demand: when central banks buy gold, they greatly boost the demand due to the large size of their purchases.
Another reason for the recent spike is the decision by the Federal Reserve to cut the rates. When the Fed cuts rates and real yields fall, gold becomes more attractive since it holds value without needing to pay interest, unlike bonds or savings. Another reason, and possibly the leading reason, is that gold is an inflation hedge. This is true because there is a limited supply of gold on the earth, making it historically resilient for holding value. Investors turn to gold when the power of a dollar is uncertain and they want a stable asset that will hold its value regardless of inflation or economic turmoil. Gold has stood the test of time as a reliable store of value, making it a favorable asset to hold for investors seeking long-term stability.
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